Michigan Congratulations You Are #1 When It Comes To Auto Insurance Rates

Great job Michigan you have topped the charts for 6 years in a row. What exactly did you do to top the charts, well you have the country’s highest auto insurance rates. You get to pay more money than anywhere else in our country for the privilege of insuring and driving your vehicle in this great state.

Insure.com performs an annual ranking of the most and least expensive states for vehicle insurance in the United States. The press release stated:

For the sixth year in a row, Michigan took the top spot as the most expensive state to insure a vehicle, with a policy average of $2,611, almost 80 percent higher than the national average of $1,457.

That $2,611 average policy cost is $372.00 higher than our 2018 survey average cost. Did you know that out-of-state residents save an average of $1,154 each year they do not live in the state of Michigan and insure a vehicle.

Many of us who live in Michigan already know we pay quite a bit of money in auto insurance premiums but do you know all the factors of why we pay so much. According to their press release:

One of the main factors causing Michigan’s high rates is its unique insurance system, which includes a no-fault car insurance scheme that requires all drivers to carry Personal Injury Protection (PIP) coverage.

As reported in a MLive article Consumer Analyst Penny Gusner said the high annual premiums are primarily due to Michigan’s unique no-fault insurance system, this system provides crash victims unlimited lifetime coverage of medical bills, this is the Michigan Catastrophic Claims Association (MCCA) fund. The MCCA is:

The Michigan Catastrophic Claims Association (MCCA), a private non-profit unincorporated association, was created by the state Legislature in 1978. Michigan's unique auto insurance no-fault law provides unlimited lifetime coverage for medical expenses which result from auto accidents. The MCCA reimburses auto no-fault insurance companies for each Personal Injury Protection (PIP) medical claim paid in excess of a set amount. Currently that amount is $555,000. That means that the insurance company pays the entire claim, but is reimbursed by the MCCA for medical costs over $555,000.

All auto insurance companies operating in Michigan are assessed to cover the catastrophic medical claims occurring in Michigan. Those assessments are generally passed on to auto insurance policyholders. The 2018-2019 assessment is $192.00 per vehicle.

She was quoted in the article stating:

The idea behind it was good, but unfortunately they didn’t know how crazy expensive medical bills would become...It just doesn’t fit what people’s needs are today.

The University of Michigan has issued their own report last month and they found that 97% of all Michigan zip codes are higher than the federal government’s definition of affordable. What is worse is approximately 20% of Michigan drivers do not carry vehicle insurance due to the high cost. That puts all of us at risk and is another reason why our vehicle insurance is so expensive.

According to Insure.com’s annual survey the states with the most expensive vehicle insurance rates are:

Michigan ($2,611)

Louisiana ($2,298)

Florida ($2,219)

Oklahoma ($1,966)

Washington, DC ($1,876)

California ($1,846)

Rhode Island ($1,834)

Delaware ($1,828)

New York ($1,789)

Texas ($1,779)

The states with the most affordable vehicle insurance are as follows:

Maine ($845)

Wisconsin ($951)

Idaho ($1,040)

Iowa ($1,047)

Virginia ($1,063)

New Hampshire ($1,087)

North Carolina ($1,095)

Vermont ($1,100)

North Dakota ($1,164)

Ohio ($1,175)

As an interesting side note, did you know that there are another 11 other states that also have a no-fault insurance system? Those 11 other states actually have a limit on the personal injury coverage amounts which keeps their insurance rates down.